Q3 2015 Earnings Review and Update November 6, 2015 1
Forward looking statements This presentation contains forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions. Actual results may differ materially from those expressed herein. Additional information concerning factors that could affect the Company’s actual results is included in the Company’s filings with securities regulators. The Company undertakes no obligation to update publicly any forward-looking statements except as required by securities legislation. All figures are in US dollars, unless otherwise noted. While rounding may occur in performance numbers for presentation purposes, percent change figures are calculated using full, unrounded numbers. 2 2
Update from Ravi Saligram Chief Executive Officer
Q3 2015 financial highlights Strong growth compared to Q3 2014, both on a constant currency (organic) basis and a reported basis Foreign exchange had an impact on some operating lines Reported - % Growth Organic - % Growth Versus Q3 2014 Versus Q3 2014 GAP 1% 9% Revenue 7% 16% Operating Income 47% 51% Diluted Adjusted EPS 41% n/a (Q3 2014 adjusting items) Diluted EPS 118% n/a Operating Free Cash Flow 75% n/a (12 month rolling) RONA 826 bps n/a (12 month rolling, excluding term loan reclass) 4 4
Q3 2015 auction highlights Fort Worth, Texas: July 22 – 23, 2015 • US$53+ million of GAP • New site record for number of lots sold (4,250+ lots) Houston, Texas: August 26 – 27, 2015 • US$45+ million of GAP • US$24+ million sold to buyers outside of Texas (53% of sales) Dubai, UAE: September 8 – 9, 2015 • US$42+ million of GAP Edmonton, Alberta: September 9 – 11, 2015 • CA$101+ million of GAP (US$76+ million) LARGEST SEPT. AUCTION EVER • 17% sold to buyers from the US LARGEST % OF US BUYER PARTICIPATION IN EDMONTON EVER • 80% sold to buyers in Canada • 7,300+ lots sold; 9,850+ registered bidders 5 5
Q3 2015 auction highlights (cont.) Donington Park, UK: July 14, 2015 • £10+ million (US$17+ million) of GAP LARGEST SALE EVER HELD AT THIS AUCTION SITE Polotitlan, Mexico: September 11, 2015 • US$19+ million of GAP LARGEST THIRD QUARTER AUCTION IN MEXICO IN RBA HISTORY Fort Worth, Texas: September 23 – 24, 2015 • US$70+ million of GAP LARGEST TEXAS AUCTION EVER • Approx. 70% sold to buyers outside of Texas • 3,775+ lots sold St. Aubin sur Gaillon, France: September 29, 2015 • €13+ million (US$15 million) of GAP LARGEST THIRD QUARTER AUCTION IN FRANCE • Also set new third quarter records for number of bidders and lots at the auction site Salt Lake City, Utah: September 29 – 30, 2015 • 3,650+ lots sold from offsite location on Day 2, demonstrating strength of our logistical capabilities 6 6
Q3 auction volume increase driven by construction 16% increase in auction volume (lots sold) compared to Q3 last year; Increase largely due to more assets from customers in the heavy construction sector Q3 Auction volumes (Lot count) Q3 2015 Incremental Lots per Customer sector Total lots sold per quarter Lot growth per customer (seller) sector, compared to Q3 2014¹ 100% 25% 85,000 21% 5,082 86% Growth of lots from customer sector Lot growth per customer sector 16% Growth from prior Q2 73,000 Number of Lots 69,000 68,000 2,284 37% 32% 6% 1,196 56,000 15% 1% 15% 6% 241 214 66 0% 0% Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2015 7 7 ¹ Selected customer sectors. Does not include all sectors equipment came from.
Average GAP per lot Average GAP per lot declined 13% in Q3 2015 compared to Q3 2014 • Due largely to FX translation of GAP (caused 8.4% decline in Avg. GAP per lot); • Also an increase in the proportion of small value lots sold due to complete dispersals Due to pricing and fee structures, RBA generates a higher revenue rate on the sale of small value items • 24% increase in small value lots (less than $2500); generate a 10% buyers premium • 20% increase in lots sold under $40,000; items under $38,000 generate higher proportion of fee revenue 8 8
Equipment pricing has remained off from Q1 peak Pricing trends are asset/sector dependent; Some categories/regions performing far better than others Forestry equipment: Late model and low hour, has shown strong demand from both • regional & national buyers in Canada and the US Oil & Gas specific equipment: Assets directly related to oil & gas such as tank trucks, • bed trucks and specialty assets continue on same erosion factor as witnessed throughout Q2 Pricing down ~10% to 25% from end of Q2 • Some heavy construction assets have shown small pricing declines • Other assets such as motor graders and wheel loaders have seen erratic market pricing, • differing with the quarter/region. Lower hour units still continue to perform well in most areas >5,000 hours • 9 9
2015: Age of equipment continues to trend better Age of Equipment sold at Ritchie Bros. Auctions¹ 3-5 yrs old: 23.7% of GAP¹ New 8.7% 4.6% 10.4% New to 1 yr Old 1 Yr Old 18.5% of GAP¹ 2 Yrs Old 3 Yrs Old 8.7% 4.8% 5.1% 4 Yrs Old 5 Yrs Old 3.6% 5.0% 10.3% 6 Yrs Old 6+ Yrs Old 7 Yrs Old 8 Yrs Old 4.2% 11.0% 12.2% 9 Yrs Old 10 Yrs Old 9.6% 12.1% 12.1% 3-5 yrs old: 35.8% of GAP¹ 11.5% 13.1% 11.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 10 ¹ Industrial auctions only. Excludes equipment over 10+ years and equipment with unknown ages. 10
Record quarterly revenue achieved in Q3 2015 Quarterly revenue & revenue rate ($US millions) 175 16.0% Revenue Rate Revenue 14.0% 150 12.2% 11.5% 12.0% 11-12% annual revenue rate range 125 10.0% Revenue fluctuates considerably 100 between quarters due to seasonality and the number of auctions held in 8.0% each period. 75 Revenue Rate fluctuations are due 6.0% primarily to the performance of the Company’s underwritten contracts. 50 4.0% 25 2.0% $102 $128 $106 $102 $109 $142 $138 $116 $155 $117 $131 $92 $99 0 0.0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 11 11
Revenue growth bolstered from both volume and rate ~56% of the organic revenue growth was driven by increases in auction volumes ~44% was driven by revenue rate improvement Breakdown of revenue growth, % attributable to item Changes in foreign exchange Q3 2015 revenue compared to Q3 2014 revenue had a negative impact on reported revenue growth 20% 7% 16% 15% 9% 10% 7% ‐ 9% 5% 0% Total Volume Rate Total Organic Growth FX Impact Total Growth 12 12
Using our underwritten business is a strategic tool Proactively encourage use of underwritten deals to drive revenues Focus on packages that act as magnets to fill the auction • Making smart decisions about when and how to use underwritten deals; not chasing • uneconomical deals Balance sheet strength is unmatched • Underwritten revenue rate is showing resilience; Continued YoY improvement in third quarter of 2015 Disciplined approach to underwritten business is resulting in more consistent performance • Strategic use of the strength of our balance sheet allows us to pursue larger underwritten transactions when good opportunities arise • Smaller transactions are receiving more scrutiny • Not a vehicle to ‘buy’ GAP 13 13
Strong revenue growth from Canada and US Strong revenue growth in the US and Canada in local currency; FX translation muted reported growth in Canada and Europe. Q3 Revenue growth rates Geographic breakdown of Q3 revenue $US reported growth; local currency $US revenue 35% 28% 28% Reported growth US Canada 17% Europe 12% 10% 7% Other 12% 53% -6% -6% -9% 25% -18% -20% US Canada Europe Other RBA - All 14 14
Q3 2015 earnings increased 40% from Q3 2014 Record quarterly earnings driven by auction volumes, strong revenue rate, and revenues growth exceeding expense growth 40% growth from Tax rate relatively consistent with adjusted Q3 2014 rate adjusted net earnings in year ago quarter Quarterly Adjusted Net Earnings¹ ($US millions) $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $20 $10 $22 $30 $16 $30 $39 $33 $24 $46 $14 $14 $14 $0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 15 ¹ Earnings attributable to Ritchie Bros. Incorporated. Excludes minority interest of Ritchie Bros. Financial Services. 15
EquipmentOne – Continuing to show improvement E1 achieved 18% revenue growth compared to Q3 last year EBITDA growth continues on a 4-quarter trailing basis EquipmentOne Revenue and EBITDA EquipmentOne Revenue and EBITDA ($US millions) ($US millions) $5 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 $3.9 Revenue $4 4 quarter average $ 3.2 $ 3.3 $ 3.4 $ 3.6 $ 3.7 $3 Trailing 12 months $ 12.7 $ 13.2 $ 13.7 $ 14.2 $ 14.8 $2 $0.5 $1 EBITDA $0 4 quarter average $ (0.6) $ (0.4) $ (0.0) $ 0.2 $ 0.5 ‐ $1 Trailing 12 months $ (2.4) $ (1.6) $ (0.2) $ 0.8 $ 2.0 ‐ $2 E1 Revenue E1 EBITDA 4 per. Mov. Avg. (E1 Revenue) 4 per. Mov. Avg. (E1 EBITDA) 16 16
Recommend
More recommend
